Spirit producers eye spiced rum potential

Could Captain Morgan’s and Sailor Jerry’s domination of the spiced rum market be coming to an end? Becky Paskin finds that the category’s dynamism is attracting attention from some serious new players.

Spiced rum offers a variety of flavours, and opportunities, for producers

To track the growth of spiced rum you only need look at the flurry of new players falling over themselves to enter the marketplace. Rewind to the noughties and you would have seen just one or two brands on the shelf, brands considered revolutionary and exciting for sailing into uncharted waters.

Nowadays the category is awash with high-profile launches from established brands like Bacardi’s Oakheart, as well as soft, low budget entrances from smaller players in domestic markets spotting the chance to succeed in a burgeoning category. As one of the newest categories in the spirits market, spiced rum is also one of the fastest growing, adding 13% volume over a five-year period to 2011 (IWSR). But much of this volume change has occurred in the past 12 months or so (9% during 2010), for several reasons.

In 2010 Sailor Jerry, which had been on the US market for 10 years and the UK for eight, famously altered its flavour profile. Its British product was a sweeter spiced rum than its US counterpart and, after taste tests, owner William Grant & Sons moved to align the brand globally by swapping the UK version.

The change caused outrage among many British fans who had become used to the taste. Spotting a chance to resolve the upset, and fill a new gap in the category, several brands flew in at once with promises to do what Sailor Jerry no longer could.

“We were asked by major supermarket chains in the UK and France to add a spiced rum to our existing range,” says Chris Lake, UK sales director at Toorank Distilleries, which launched Rebellion Spiced earlier this year. “That’s when we noticed the demand for a sweeter, spicy vanilla flavour as a result of Sailor Jerry changing their flavour profile. It’s the easiest launch we’ve ever had.”

Spiced rum lead
Already launched in the UK, France, Spain, the Netherlands and Poland, Toorank aims to take the Rebellion rum range global, starting next year with Germany, Italy and the US. Already three times ahead of its forecasted volume, Toorank has very achievable plans to own at least 10% of the spiced rum market in the UK within the next five years. High-profile sponsorship of events like the MOBO Awards this year will almost certainly help its cause.

Despite producing a dark and a white rum for around 15 years, Rebellion intends to lead the range into new markets with the spiced variety. The reason, Lake explains, is because both the dark and white categories are already dominated by too many major players.

“White and dark rums in reality are difficult markets because unless you spend a lot of money on advertising, the markets are largely tied up,” he says. “We use the spiced as the lead rum because it’s still such a new and open market. There’s no real brand loyalty yet.”

Diageo spied the potential for its Captain Morgan’s Spiced way back in the 1980s, and is undoubtedly the category leader after playing for so long on its own. The group is hesitant to divulge the exact volume of its spiced variety, although Russell Jones, global brand director for Captain Morgan, claims it is the biggest driver behind the Captain Morgan rum brand’s sales, which grew by over 500,000 cases in the last financial year to hit the major milestone of 10m cases in December 2012.